Oil prices rose by a dollar per barrel on Wednesday due to higher demand expectations caused by multi-month highs in U.S. corn and soybean prices. The grain markets had been stagnating due to worries over crop shortages around the world, which would severely impact biofuels blending and increase demand for oil. Brent futures increased by 1.6% to $77.12 a barrel, while U.S. West Texas Intermediate (WTI) crude futures rose by 1.9% to $72.53 per barrel. This came amid news that U.S. corn crops were being stressed by dry conditions, with soybean prices also hitting highs not experienced since March 9. Furthermore, crude oil inventories were expected to have lowered last week, indicating stronger demand. Finally, the U.S. dollar fell due to Federal Reserve Chair Jerome Powell insinuating that the central bank was close to its policy destination. This made dollar-denominated oil more attractive for investors holding other currencies, thus raising demand.
Oil prices surge amidst tightening grain markets and falling dollar due to remarks from Federal Reserve Chair.
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